Entrepreneurial Finance, 7th Edition
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J. Chris Leach, Ronald W. Melicher
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Chapters 1 - 16 With CAPSTONE CASES
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,TABLE OF CONTENTS zz zz zz
Part 1: THE ENTREPRENEURIAL ENVIRONMENT.
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1. Introduction to Finance for Entrepreneurs. zz zz zz zz
2. Developing the Business Idea. zz zz zz
Part 2: ORGANIZING AND OPERATING THE VENTURE.
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3. Organizing and Financing a New Venture. zz zz zz zz zz
4. Preparing and Using Financial Statements. zz zz zz zz
5. Evaluating Operating and Financial Performance. zz zz zz zz
z z Part 3: PLANNING FOR THE FUTURE.
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6. Managing Cash Flow. zz zz
7. Types and Costs of Financial Capital.
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8. Securities Law Considerations When Obtaining Venture Financing.
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z z Part 4: CREATING AND RECOGNIZING VENTURE VALUE.
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9. Projecting Financial Statements. zz zz
10. Valuing Early-Stage Ventures. zz zz
11. Venture Capital Valuation Methods. zz zz zz
Part 5: STRUCTURING FINANCING FOR THE GROWING VENTURE.
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12. Professional Venture Capital. zz zz
13. Other Financing Alternatives. zz zz
14. Security Structures and Determining Enterprise Values.
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6: EXIT AND TURNAROUND STRATEGIES.
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15. Harvesting the Business Venture Investment. zz zz zz zz
16. Financially Troubled Ventures: Turnaround Opportunities? zz zz zz zz z z Part
7: CAPSTONE CASES.
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Case 1. Eco-Products, Inc.
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zz Case 2. Spatial Technology,
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,Chapter 1 zz
INTRODUCTION zzTO zzFINANCE zzFOR zzENTREPRENEURS z z FOCUS
The zzpurpose zzof zzthis zzfirst zzchapter zzis zzto zzpresent zzan zzoverview zzof zzwhat zzentrepreneurial zzfinance
zzis z z about. zzIn zzdoing zzso zzwe zzhope zzto zzconvey zzto zzyou zzthe zzimportance zzof zzunderstanding zzand
zzapplying z z entrepreneurial zzfinance zzmethods zzand zztools zzto zzhelp zzensure zzan zzentrepreneurial
zzventure zzis z z successful.We zzpresent zza zzlife zzcycle zzapproach zzto zzthe zzteaching zzof zzentrepreneurial
zzfinance zzwhere z z we zzcover zzventure zzoperating zzand zzfinancial zzdecisions zzfaced zzby zzthe
zzentrepreneur zzas zza zzventure z z progresses zzfrom zzan zzidea zzthrough zzto zzharvesting zzthe zzventure.
LEARNING zzOBJECTIVES
LO zz1.1: zzCharacterize zzthe zzentrepreneurial zzprocess.
LO zz1.2: zzDescribe zzentrepreneurship zzand zzsome zzcharacteristics zzof zzentrepreneurs.
z z LO zz1.3: zzIndicate zzseveral zzmegatrends zzproviding zzwaves zzof zzentrepreneurial
z z opportunities.LO zz1.4: zzList zzand zzdescribe zzthe zzseven zzprinciples zzof
zzentrepreneurial z z finance.
LO zz1.5: zzDiscuss zzentrepreneurial zzfinance zzand zzthe zzrole zzof zzthe zzfinancial
z z manager.LO zz1.6: zzDescribe zzthe zzvarious zzstages zzof zza zzsuccessful zzventure‘s zzlife
z z cycle.
LO zz1.7: zzIdentify, zzby zzlife zzcycle zzstage, zzthe zzrelevant zztypes zzof zzfinancing zzand
z z investors.LO zz1.8: zzUnderstand zzthe zzlife zzcycle zzapproach zzused zzin zzthis zzbook.
CHAPTER zzOUTLINE
1.1 THE zzENTREPRENEURIAL zzPROCESS
1.2 ENTREPRENEURSHIP zzFUNDAMENTALS
A. Who zzis zzan zzEntrepreneur?
B. Basic zzDefinitions
C. Entrepreneurial zzTraits zzor zzCharacteristics
D. Opportunities zzExist zzBut zzNot zzWithout zzRisks
1.3 SOURCES zzOF zzENTREPRENEURIAL zzOPPORTUNITIES
A. Societal zzChanges
B. Demographic zzChanges
C. Technological zzChanges
D. Emerging zzEconomies zzand zzGlobal zzChanges
E. Crises zzand z z ―Bubbles‖
F. Disruptive zzInnovation
1
, 1.4 PRINCIPLES zzOF zzENTREPRENEURIAL zzFINANCE
A. Real, zzHuman, zzand zzFinancial zzCapital zzmust zzbe zzRented zzfrom zzOwners zz(Principle zz#1)
B. Risk zzand zzExpected zzReward zzgo zzHand zzin zzHand zz(Principle zz#2)
C. While zzAccounting zzis zzthe zzLanguage zzof zzBusiness, zzCash zzis zzthe zzCurrency zz(Principle zz#3)
D. New zzVenture zzFinancing zzInvolves zzSearch, zzNegotiation, zzand zzPrivacy zz(Principle zz#4)
E. A zzVenture‘s zzFinancial zzObjective zzis zzto zzIncrease zzValue zz(Principle zz#5)
F. It zzis zzDangerous zzto zzAssume zzthat zzPeople zzAct zzAgainst zzTheir zzOwn
zzSelf- z z Interests(Principle zz#6)
G. Venture zzCharacter zzand zzReputation zzcan zzbe zzAssets zzor zzLiabilities zz(Principle zz#7)
1.5 ROLE zzOF zzENTREPRENEURIAL zzFINANCE
1.6 THE zzSUCCESSFUL zzVENTURE zzLIFE zzCYCLE
A. DevelopmentzzStage
B. Startup zzStage
C. Survival zzStage
D. Rapid-Growth zzStage
E. Early-Maturity zzStage
F. Life zzCycle zzStages zzand zzthe zzEntrepreneurial zzProcess
1.7 FINANCING zzTHROUGH zzTHE zzVENTURE zzLIFE zzCYCLE
A. Seed zzFinancing
B. Startup zzFinancing
C. First-Round zzFinancing
D. Second-Round zzFinancing
E. Mezzanine zzFinancing
F. Liquidity-Stage zzFinancing
G. Seasoned zzFinancing
1.8 LIFE zzCYCLE zzAPPROACH zzFOR zzTEACHING zzENTREPRENEURIAL zzFINANCE
z z SUMMARY
DISCUSSION zzQUESTIONS zzAND zzANSWERS
1. What zzis zzthe zzentrepreneurial zzprocess?
The zzentrepreneurial zzprocess zzcomprises: zzdeveloping zzopportunities, zzgathering zzresources,
z z andmanaging zzand zzbuilding zzoperations zzwith zzthe zzgoal zzof zzcreating zzvalue.
2. What zzis zzentrepreneurship? zzWhat zzare zzsome zzbasic zzcharacteristics zzof zzentrepreneurs?
Entrepreneurship zzis zzthe zzprocess zzof zzchanging zzideas zzinto zzcommercial zzopportunities zzand
z z creatingvalue. zz zzWhile zzthere zzis zzno zzprototypical zz entrepreneur, zzmany zzare zzgood zzat
zzrecognizing z z commercial zzopportunities, zztend zzto zzbe zzoptimistic, zzand zzenvision zza zzplan zzfor zzthe
zzfuture.
3. Why zzdo zzbusinesses zzclose zzor zzcease zzoperating? zzWhat zzare zzthe zzprimary zzreasons zzwhy
zzbusinesses z z fail?